December 2010

The typical case of North Carolina workers’ compensation fraud involves only one kind of crime. But a breaking case out of the Bronx has been getting special attention throughout the workers’ comp community for its sheer complexity. On December 15th, New York police arrested 60-year-old Rosa Rivera, after prosecutors investigating her for federal tax fraud discovered that she had collected over $135,000 in workers’ comp benefits from New York State illegally. Ms. Rivera’s compounding legal woes illustrate just how seriously the government takes any fraud. Her story serves as a cautionary tale for those who have been toying with the idea of skirting the workers’ comp laws, rules and regulations.

It all began in 2002. Rivera, who had been working as a bookkeeper, hurt her elbow, ankle and knee at work. She claimed the injuries prevented her from working. The NY Workers’ Compensation Board awarded her $400 a week in benefits. Meanwhile, in 2004, right under the nose of authorities, she began operating an income tax filing service out of her home. She ran this business for 5 years, until she was stopped in October 2009 and charged with fraud for filing false tax returns for her business. In September, Ms. Rivera pled guilty to the federal charges and got ordered to pay restitution in excess of $150,000. She also faces a two year probation.

Now, with this additional workers’ comp fraud charge — a fraud amounting to $135,000+ allegedly purloined from the New York State Insurance Fund (NYSIF) — she may face up to 7 years behind bars. Her hearing at a Suffolk County Court has yet to be scheduled.

Defrauding the North Carolina workers’ compensation system – or any state system – can get you in serious trouble, even if you plead things like hardship or extreme circumstances. For instance, Ms. Rivera’s benefits of $400 a week certainly could not be considered lavish by any standards – particularly by New York City standards. So it’s understandable that individuals on worker’s comp might want to find ways to supplement their income. But if you skirt the law or bilk the system by lying about your injuries — pretending they’re worse than they really are — not only do you cheat the legitimately injured, but you also create hostility and distrust amongst the various participants in the NC workers’ comp system.

If you’ve been having trouble with an insurance company or employer — or with the bureaucracy in general — a qualified North Carolina workers’ compensation law firm can provide crucial, timely guidance. Empower yourself today by getting a better education in workers’ comp rules.

Most blogs and journal articles about North Carolina workers’ compensation focus on local, state, regional, and (occasionally) interstate issues. But a feisty debate over worker’s rights and entitlements half a world away in Canberra, Australia has many local analysts, insurers, and employers talking.

According to an ABC News report, the Australian ACT Government’s proposals to amend workers’ comp legislation in Canberra sent hundreds of Aussie workers to the streets. Unions for tradespeople, bus drivers, and nurses, in particular, have vociferously opposed the proposed changes. A local union secretary, Kim Sattler, articulated the workers’ case plaintively: “people work hard, and they are bargaining to actually maintain proper wages and conditions and entitlements. And yet each time we come back to the table, we are asked to reduce those requests… workers are the ones who are paying the price of economic prosperity for everybody else.”

The ABC News article points out that the ACT Government opposes the union challenges and says that the unions “want to protect the rights of a small minority.” Katy Gallagher, a minister of Industrial Relations for the Government, noted “[the Unions] have always taken this position, but we’ve been working for years on trying to improve workers’ compensation… we are very worried that only about 17% of the scheme’s funds actually go to rehabilitation costs.”

The reason why this Australian story may be germane to North Carolina workers’ compensation issues is that it touches on a very thorny issue: namely, what percentage of workers’ comp entitlements actually go towards healing workers and getting them back to work? And what percentage gets wasted or serves merely to “indulge” lazy or non-motivated injured workers?

It’s almost impossible to quantify, in a meaningful way, when entitlements cross the line from serving as a needed help to becoming a crutch for workers and a drain on the system. Only the most die-hard libertarians would argue that the state should do away with its compensation system. Likewise, even the most die-hard workers’ comp advocates would not argue that the state’s entitlement systems shouldn’t have regulations and cost controls.

The $64,000 question is: where can we find the delicate balance between these extreme positions?

Moreover, what can be done to maximize the leverage that workers’ comp dollars yield for both workers and for the economy? For instance, this blog has talked a lot about preventative care. In other words, if we could collectively focus more on preventing workplace accidents, injuries, and illnesses, we could far better leverage the monies that flow through the system. For instance, eliminating sugary snacks and soda beverages at offices probably wouldn’t cost much… but it would likely yield serious savings in terms of better employee health over the long term.

Pulling back from this abstract discussion… let’s focus on your concerns as an injured or sick worker. You may not be getting fair due from the system because an employer is not cooperating with you or an insurance company is acting in bad faith somehow. To drive the system to be more responsive, get in touch with a qualified North Carolina workers’ compensation law firm now.

Many high profile North Carolina workers’ compensation cases have major interstate elements. A recent case filed by the Texas Insurance Department’s Division of Workers’ Compensation demonstrates how interconnected states like North Carolina, Texas, and Pennsylvania can be when it comes to workers’ comp claims and insurance disputes.

A Philadelphia-based company called ACE American Insurance Company was fined $221,000 for failing to pay key medical costs and failing to comply with the Texas Workers’ Comp Commissioner’s rulings. According to local sources, ACE had to pay a $74,000 fine pursuant to the company’s failure to respond to preauthorization requests and failure to pay for certain key treatments, services, and emergency care. In a second case, the insurance company paid out $147,000 pursuant to its failure to pay indemnity and medical benefits and failure to comply with the Texas Commissioner’s orders. ACE also did not pay medical bills according to Texas’ medical fee guidelines.

While this kind of case is not exactly novel – insurance companies have been known to try every tactic and strategy in the book to get out of paying North Carolina workers’ compensation claims – the story does illustrate the truly interstate ramifications of workers’ comp disputes.

Here you have a Philadelphia-based company dealing with allegations drawn up by the Texas Workers’ Comp Commissioner. Although states do make independent decisions regarding their workers’ comp programs, this case illustrates the essential interconnectedness of the US workers’ comp systems. National and even transnational players, like insurance companies, funds, and big businesses, often get deeply embroiled in state-specific litigation.

Fortunately, most workers’ comp claimants don’t have to worry about these highly technical ramifications. If you have been recently injured at work – or if you know someone who has come down with an occupational disease, such as bronchitis or repetitive stress injury, from work related activities – you want a simple, clear and precise strategy to get your benefits as quickly as possible and reboot both your health and your career.

Often, debates about the efficacy and fairness of the North Carolina workers’ compensation system revolve around isolating an “at fault” constituency and punishing that constituency. For instance, there is the “insurance companies are to blame” school; there is the “stingy/unethical employers are to blame” school; there is the “lazy lying workers are to blame” school; and there is the “entire system is broken so there’s really nothing any well-intentioned person can do anymore” school.

Unfortunately, by dividing up the participants in the North Carolina’s workers’ compensation system into “good guys” and “bad guys” – irrespective of the rightness or wrongness of those categorizations – we may be overlooking some easy “win-win” solutions that could improve the system’s efficacy and effectiveness without causing pain to any participants.

One important strategy involves information sharing and information processing. Like most state workers’ comp systems, the North Carolina workers’ compensation system often finds itself gummed up by needless bureaucracy, long wait times, and paperwork. Almost all organizations – state run and privately run – find themselves overloaded with information these days. This overload makes it difficult to sort the wheat from the chaff — harder to make good decisions.

Practically speaking, this might mean that an injured woman who needs back pain medication may have to go through a grueling wait process to get approved. Or it might mean that an employer gets stuck dealing with tons of workers’ comp paperwork and has to spend dozens of man-hours dealing with claim forms instead of attending to his business. Even insurance companies suffer from the stifling bureaucracy. All of the paper shuffling and information mis-management that goes on at big insurers surely drains these companies’ bottom lines. Insurers may then end up passing these costs down to consumers.

So how can we go about in some systematic, industry-wide way cutting through the clutter and eliminating bureaucracy? Obviously, this is way too big a topic for one small blog post to handle. But consider these suggestions:

1. Solicit ideas from people “in the trenches” about how/where we can collectively save time, money and resources.

Talk to everybody involved, from the state insurance commissioner down to claims processors, injured workers, and small business employers, about their frustrations and innovations. There is no need to impose “top-down” solutions to cut through bureaucracy – often, the people “in the trenches” intuitively and immediately understand what needs to be done.

2. Simplify Simplify Simplify

Apply the “KISS” (Keep it Simple, Stupid) principle throughout the system to identify and do away with needless complications, paperwork, and restrictions.

3. Restrict the flow of information to find liberation.

Author Timothy Ferriss in The 4-Hour Work Week, talks about the benefits of a “low information diet.” By allowing information to pour into your environment, office, insurance company, or wherever, you set the stage for info overload and overwhelm. The easy fix is to turn down the informational faucet – to eliminate all but the most essential, need-to-know info from your life and business.

If you or someone you care about got hurt at work or suffered a job-related chronic illness, you may have lots of questions about how to handle your benefits case. Connect with a North Carolina workers’ compensation law firm today to explore methods for getting more out of your case.

On December 8, New York police arrested Kevin Schwebke, a 26-year-old corrections officer, for felony grade workers’ comp fraud. North Carolina workers’ compensation pundits and others who follow stories about fraud and corruption in the world of workers’ comp, have been hotly discussing the legal and even moral implications of this matter.

First, the facts. Schwebke had been working at the Coxsackie Correctional Facility in 2009 when he got into an accident on the job that damaged his ankles. After undergoing surgery, Schwebke went on workers’ compensation. Up until Wednesday, he had amassed $34,000 in payments. Meanwhile, Schwebke continued working for the Cairo Police Department on a part-time basis – in violation of his workers’ comp arrangement. The Chief of Police, Chris Sprague, said that he had not been aware that Schwebke had been collecting workers’ comp.

If convicted of the class E felony charge, Schwebke could face a seven-year state prison sentence. He will appear at Albany County Court to face the charges at a later date.

This seemingly simple case has some very interesting implications. Let’s just say that the 26-year-old did in fact lie about his physical condition to collect the $34,000 illegally.

Is it really fair to punish someone for this level of minor fraud with seven years in state prison? Doesn’t that seem somewhat excessive, from a common sense standard? Obviously, you don’t want to reward workers’ comp fraud or encourage it in any way. But at least theoretically, it’s odd that someone who commits such a relatively minor crime (from a purely monetary standpoint) should be subjected to such a harsh potential jail sentence, especially when you consider that much more serious white collar crimes, like corporate fraud and embezzlement, often carry less punitive consequences.

On the other hand, North Carolina workers’ compensation fraud is a profound problem, not just in terms of the money it leeches from the system but also in terms of the culture of distrust it creates. When insurers can’t trust whether claimants are telling the truth, they ratchet up investigations and force legitimately hurt workers to jump through more hoops. When stories like Schwebke’s break, employers become more suspicious of their workers. It’s hard to quantify how all this distrust percolates through the system, but the toxic atmosphere surely drains time, resources, and money and makes it more difficult for the system to function effectively – that is, to rehabilitate legitimately hurt workers and get North Carolina’s workforce up and running at maximum effectiveness.

Have you been having trouble collecting your benefits due to your employer’s lack of cooperation or an insurance company’s recalcitrance? Whatever your issues, you may benefit greatly from engaging in an free confidential consultation with a reliable North Carolina workers’ compensation law firm today.

Most North Carolina workers’ compensation policy analysts focus on “after the fact” remedies for workplace injuries and diseases. In other words, they focus on how to get injured workers paid for things like back surgery, time off of work, and finger amputations. They also look at how insurance companies can provide better service at more affordable rates and how employers can cut through red tape to give their employees the protection they need without compromising the business’s finances or other objectives.

But what’s missing in this discussion, overall, is frank and specific talk about preventing injuries and diseases. As the old adage goes, “an ounce of prevention is worth a pound of cure.” This cliché is common advice that’s unfortunately uncommonly practiced. Rather than focus so much on solving problems once they have already occurred, we in the North Carolina workers’ compensation system should collectively focus our energies more on attacking the root causes of workplace injures with the goal of ultimately making workplaces from the Research Triangle to the far west of the state safer for all employees.

To that end, we need to recognize dangers that often go unremarked upon – and try to figure out how to deal with these pernicious hazards.

1. Too much sugar in the workplace

Whether you work as an high powered banking executive in the Research Triangle, or you supervise a construction crew in a rural part of far western North Carolina, chances are you encounter sweets many times during your day. There might be a vending machine in your office lobby that sells extremely sugary drinks. Your secretary may keep a bowl of delicious candy on his desk. Or, if you work at a large office, you may be asked to partake in weekly or even biweekly birthday parties for your office mates, during which you’ll be fed cupcakes, ice cream, and other goodies.

The problem is that all of this sugar is extremely bad for people – bad for workers, bad for the cardiovascular system, and bad for our collective health. Furthermore, eating too much sugar can make you feel lethargic, less attentive, lightheaded, and more. Excessive sugar consumption can also lead to problems such as diabetes, heart disease, and perhaps even cancer. If North Carolina workers and employers could focus on reducing their collective sugar consumption, this would almost certainly lead to reductions in things like workplace accidents, sick days, and occupational diseases (sugar also compromises the immune system).

2. Too much informational input

Whether you are an office worker bombarded by dozens of emails everyday; or you are a construction foreman snowed under by frustrating paperwork, chances are that you get more information than you can comfortably process. Studies suggest that this overconsumption of information can be hazardous: it can lead to inattention at the workplace, general fatigue, and even depression and anxiety.

3. Not enough sunlight

Medical studies suggest that most people could benefit from getting regular sun exposure to boost levels of Vitamin D and stimulate the immune system. Unfortunately, many North Carolina workers don’t get enough sun exposure – they are trapped in office buildings all day – and this lack of natural sunlight could impair mood, cause fatigue, and lead to inattention that could further stimulate on-the-job injuries and other problems. Perhaps employers could institute a 20-30 minute break per day – kind of like a “recess” – during which workers would be encouraged to go outside and recharge.

4. Bad Ergonomics

Whether you sit in a chair for 8 hours a day, spend 8 hours doing repetitive tooling and machining work, or engage in some other repetitive or physically uncomfortable activity, you could be setting yourself up for long-term work-related injuries. Working at a computer, for instance, can create all sorts of problems from eye strain to thoracic outlet syndrome to lower back problems. Remedies could include taking regular breaks, getting better and more ergonomic office equipment, using programs like Feldenkrais or the Alexander Technique, engaging in strength training, and changing up your work tasks so that they are not as repetitive.

If you or someone close to you needs guidance with a workers’ comp issue, connect with a quality and experienced North Carolina workers’ compensation firm to go over your options and ensure that you get all benefits owed to you.

Analysts often get mired in the details of internal state policy, spending time reviewing in-state cases and poring over announcements from individuals like Insurance Commissioner Steve Poizner to understand factors shaping the North Carolina workers’ compensation system.

But sometimes it’s instructive to attend to the trials and tribulation of other state’s workers’ comp programs. To wit, a November 23 report out of Austin, Texas highlights a slew of nagging problems with that state’s Division of Workers’ Compensation (DWC). The report identified four serious problems that “significantly inhibit” the DWC’s ability to offer benefits and care for workers hurt on the job. The points get technical and dry, but they are worth quickly reviewing:

1. The Texas DWC allegedly does not process complaints about medical practitioners well, so system auditors cannot evaluate the consistency and appropriateness of any disciplinary actions. 2. The complaint process the DWC uses fails to comply with the Texas Labor Code. 3. The way healthcare providers get chosen creates major inefficiencies and results in the “overutilization” of healthcare. 4. DWC also has problems in engaging in sanctions and enforcing its decisions.

Texas professionals plan to meet on December 14 in Austin to discuss how to rehabilitate the Division of Workers’ Compensation. But the ongoing struggles in the Lonestar State should alert analysts and policymakers who focus on North Carolina workers’ compensation to the sheer size and scope of some of the crises we face.

One major theme that emerges here is the idea that failure to process information effectively can have serious systemic consequences. State bureaucracies are not exactly known for being efficient. But lack of a structured set of processes and systems gums-up the whole system. It forces people to engage in extra paperwork. It drains resources from already resource-strapped and time-strapped individuals.

New developments in information processing theory may be useful. For instance — and this may sound silly at first — but imagine if everyone in the system adopted the “K.I.S.S. principle” (keep it simple, stupid) when developing their systems and procedures. A return to simplicity could make regulations and restrictions clearer, allow employers and hurt workers to make better decisions and foster a more genial overall spirit.

Stepping back from these global and philosophical implications…

If you’ve recently been put out of work by an injury or occupational disease, or if your family has been struggling to collect benefits from an insurance carrier, you are probably less concerned with what’s going on in Texas and much more concerned with questions like: “How am I going to feed my family if my benefits run out?” and “What can I do to heal faster so I can get back to work?”

Whether you are a freshly injured worker who’s had to go on North Carolina workers’ compensation due to a computer typing injury or construction injury; or you are a healthy worker who wants to avoid on the job accidents or diseases, you may benefit from the following tips about how to stay safe over this holiday season. As joyous as the December holidays can be, problems at office Christmas parties, schedule changes, and icy winter weather can all make your work more treacherous than it is typically. Let’s analyze these issues.

1. Winter weather

Although North Carolina does not often get blitzed by blizzards, inclement winter weather, such as cold spells, sleet, snow, slush and freezing rain, can make your job more hazardous. If you are a delivery worker, for instance, it’s easy to envision yourself getting lost on an icy North Carolina road, sliding off into an embankment, dislocating your shoulder, and having to go on workers’ comp for all of 2011. This is something you want to avoid. To that end, pay extra attention during the winter to weather conditions. Go to weather.com to look up your local forecast. And keep your co-workers informed of any upcoming storms or squalls as well.

2. Watch the alcohol

The Yuletide season is a time of much carousing. You’ve worked hard in 2010, and you deserve to engage in a little frivolity and fun. But clowning around at an office Christmas party can result in serious injuries to you or your co-workers, even if you don’t work in an environment that contains heavy machinery, toxic chemicals or fire hazards. Remember: alcohol and other intoxicants and work do not mix. So if you are organizing or participating in a holiday party, rigorously adhere to safety standards. Obviously, you don’t want to be a “stick in the mud,” but neither do you want to spend the bulk of 2011 out of work at home in a back brace and on North Carolina workers’ compensation.

3. Beware of schedule changes

This is a tricky one. During December, work hours shift suddenly and become irregular. Obviously, many people take off the Christmas holiday. Others take off Hanukkah. Still others take off extended vacations to visit family out of state. This means that your shift lengths may change, and there may be a more lax and casual atmosphere at the office or work site as a result. Changes in schedule, substitutions, and shifts in your work environment can be a surprisingly terrifying cocktail. They can cause increased risk for accidents and injuries.

If you or a co-worker has experienced an injury or disease or other work-related health problem, protect your benefits by discussing your needs with a North Carolina workers’ compensation law firm ASAP. The faster you get good advice, the easier it will be for you to move forward with your life and enjoy a healthy and prosperous 2011.

Steve Poizner, the outgoing Insurance Commissioner for the CA Department of Insurance, has slapped down a request to hike Califonia workers’ compensation rates up by 27.7% for 2011, a move that has North Carolina workers’ compensation analysts talking. The insurance industry, represented most vocally by the Workers’ Compensation Insurance Rating Bureau, is not exactly singing Poizner’s praises. Last year, the group asked for a 30% rate hike, but the Department of Insurance denied the hike. They claim that, since 2008, actual premiums have only increased by 3% – due perhaps to competition and employer adaptations.

The state compensation fund will hike up its rate by 5.2% starting first of the New Year – similar to the premium increase the fund adopted in 2010.

Poizner has been at loggerheads with insurers in the past. In 2009, he spelled out more than two dozen efficiencies that insurers could avail themselves of to cut costs. He struck a disappointed tone in a recent statement: “workers’ compensation insurers have failed to demonstrate that they have adopted procedures to control costs so that they are operating efficiently.”

Poizner aims to push through several reforms to improve the review process to make everything. Those in the North Carolina workers’ compensation system are paying attention. His proposed reforms include:

1. Come up with advisory premiums based on the real rates that insurers file as opposed to theoretical benchmarks.

2. Include clear tables to help employers classify their workers, so that they can understand how rate changes will impact their businesses.

3. Use better data monitoring and filing techniques to help consumers understand how insurance pricing actually works and to avoid getting lost in the details, which can often get quite byzantine (i.e. complicated), even for professionals in the field.

If you or someone you care about has been struggling with a benefits issue – maybe an insurance company has stalled on approving a claim; or maybe your employer claims you got hurt at a previous job and not at your current one – avail yourself of the resources of a quality North Carolina workers’ compensation law firm.

Don’t fight a complicated, technical legal battle on your own. Even if you school yourself on all applicable rules and regulations, you could still make small errors which could have catastrophic consequences for your benefits, and, more broadly, for your ability to return to full health and productivity.

If the U.S. Postal Service defaults, what will happen to North Carolina workers’ compensation for postal workers? According to an August 29 article in Reuters, USPS might default on an enormous $1.2 billion payment in 2012, putting postal employees who rely on North Carolina workers’ compensation at risk of a possible loss of benefits. Reuters summarized the sobering news as follows: “The mail carrier, which has been losing billions of dollars each year, has more than 560,000 full-time employees, the largest pool of workers covered by the Federal Employees Compensation Act.”

It may not be time to panic just yet. The Postal Service should have no problem paying these benefits at least through the first three quarters of 2012. But starting in the last four months of fiscal year 2012, more than 2 million federal employees and USPS employees could be impacted.

Fortunately, the Postal Services is not sitting idle. In June, USPS suspended paying into a retirement fund to save approximately $900 million to pay down the workers’ compensation bill due. The agency is dealing with a two-fold problem – a sharp cut in the volume of mail due to electronic communications coupled with “skyrocketing employee costs.” The USPS has begged Congress to overhaul aspects of its business model and also offer some relief from upcoming payments. But the bruising fight over the deficit and debt ceiling may make it difficult for the USPS to get any significant reforms on the floor. Moreover, “the Labor Department said…that there is no penalty if the Postal Service skips the workers’ compensation payment.”

This is all pretty scary news, even if your North Carolina workers’ compensation benefits are in no way tied to the Postal Service or to any kind of federal program. The reason that it’s scary is because it implies that workers’ comp funds may be more brittle and less sacrosanct than hurt and sick workers would like them to be. In other words, we depend on workers’ comp as a kind of crutch to help us get back on our feet. But if/when that crutch gives out – due to poor fund management or some other deep structural flaw in the fund’s business model – then individual beneficiaries could suffer a hard landing.

There are so many aspects of the workers’ compensation system that are way out of your control – the USPS crisis is just one of tens of thousands – so it is important to concentrate on what you can control. Similarly, you want to avoid getting caught up in thinking and worrying about worst-case scenarios and, instead, focus on what you want to occur and what resources you need to achieve your financial goals. To that end, you might find it useful to talk to a North Carolina workers’ compensation law firm about what steps you should (or should not) take to ensure the best outcome for your situation.

To wit, a monumental brouhaha is brewing in Seattle, Washington over a reform program championed by WA businesses. Theoretically, the reforms could save the Washington workers’ comp system upwards of $1.2 billion, including a one-time net savings of $730 million. Different entities within the Washington government have proposed wildly different estimates of the savings that the business backed plan would generate. Labor groups are vociferously protesting; they have put forward a different plan that may save the system approximately $450 million over the next several years.

According to the Seattle Times, WA governor Chris Gregoire is treading carefully, aiming to split the different between these two plans. The state’s Office of Financial Management believes that one quarter of all injury claims in WA (approximately 7,000 cases) will end up at settlement. The Chair of Washington state’s House Labor Committee, representative Mike Cells, doesn’t plan to give the bill a hearing, stalling its advance.

But although Washington is located literally thousands of miles away from North Carolina, it’s a mistake to underestimate the influence that out of state battles over benefits and entitlements can have on the timbre of debate here in NC. As we’ve explored in other posts, states around the union are desperate to get workers’ comp costs under control. (Witness the recent very public battles in both Illinois and California over similar issues.) As the national economy continues to stall and unemployment rates remain stubbornly high, political figures will look at entitlement programs like unemployment and workers’ comp to identify places to cut.

The problem is that indiscriminate, non-strategically optimized cutting may not necessarily save states. Slashing may also create longer term headaches — not just for hurt and injured workers, but also for the states’ fiscal health. Imagine, for instance, if the North Carolina General Assembly passed a draconian measure to chip away at workers’ comp. Say, for instance, the benefits period maxed out at 250 weeks. What might happen to all those hurt and sick workers? Where will they get money to support their families and to pay for rehab and medical bills? It’s not like these people will just disappear.

Obviously, there is no quick solution to these problems. And if you are personally struggling with an employer or insurance company, a consultation with a North Carolina workers’ compensation law firm can be crucial to making sure that you’re treated fairly and justly — and that you have the information you need to get your health back on track.